TaxCorporate TaxHMRC targets ‘false self-employment’

HMRC targets ‘false self-employment’

Grant Thornton’s head of tax puts boot into HMRC’s latest foray into the construction industry

When the usually diplomatic tax expert Francesca Lagerberg describes the
title of a new consultation document from the taxman as “inflammatory”, then
advisers should sit up and take notice.

The national head of tax for Grant Thornton has put the boot into HM Revenue
& Customs’ latest foray into the tax affairs of the construction industry.

HMRC’s “False self-employment in construction: taxation of workers” looks at
recouping tax from an estimated 300,000 workers who operated on sites without
supplying their own tools, who “are the most likely to be falsely
self-employed”.

The taxman believes £350m is lost annually through these workers failing to
pay enough tax and national insurance.

The main bone of contention surrounds three tests on the provision of workers
own equipment and materials. Meeting the criteria could see workers classed as
employed.

“It’s a very controversial document,” said Lagerberg on Accountancy Age TV.
“The tests are too broad, capture potentially too many people and need more
consideration.”

Anne Redston, visiting professor at Kings College London, said bringing
formerly self-employed workers onto companies’ payroll would cause a huge admin
burden.

“With the construction industry in the doldrums this must be bad from the
government’s point of view. Advisers must read this document.”

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